Medicaid rates for behavioral health increasing

Medicaid expansion, a decade-in-the-making measure that is expected to provide health insurance to more than 600,000 low-income North Carolinians, will take effect in less than two weeks.

But the coverage created by expansion is only useful if eligible residents have access to health care providers that accept Medicaid. That’s particularly true for people looking for mental health care, which has been in even higher demand since the COVID-19 pandemic.

Behavioral health providers of all types across the state— but particularly mental health practitioners — have complained for years that they are not adequately reimbursed for services covered by the government-funded program. In fact, they often lose money by treating Medicaid patients, and that has prompted an exodus of providers from the program.

The N.C. Department of Health and Human Services hopes to make the situation more tenable by raising the minimum reimbursement rates for behavioral health care for the first time since 2012.

The new rates announced Wednesday by DHHS will apply to most Medicaid-covered treatments for mental health and substance use disorder. They will also apply to services for patients with intellectual and developmental disabilities, along with services for patients living with traumatic brain injury.

In an interview with NC Health News, Kody Kinsley, head of DHHS, said the increased rates, which take effect on Jan. 1, will be permanent thanks to $200 million in recurring funds allocated by the General Assembly.

“It’s a huge investment in our provider community,” he said. “It’s a huge investment in increasing the amount of provider workforce, and it’s going to open up the tap and access for people who so desperately need it.”

Behavioral health providers, he added, couldn’t “stay in business on the rates that were being paid.”

“We’re in a situation where we hear all the time every single day that we don’t have providers,” state Sen. Sydney Batch (D-Raleigh) said on a bipartisan panel this week at the North Carolina Institute of Medicine annual meeting. “I know a lot of therapists that are not practicing because the reimbursement rates are too low.”

Under the current fee schedule, facilities are paid less than $500 a day for inpatient psychiatric care. They will receive nearly $900 under the new rate, according to Kinsley. Reimbursement for inpatient psychiatric care is expected to increase by 30 percent overall.

“You can have a child in the ED and you will get $3,000 a day, potentially, for that child if they’re sick, but if they’ve had a mental health crisis, you’re gonna get pennies on the dollar,” Batch said. “We do not value behavioral health at the same level as we do physical health.”

Psychiatrists will also see more than double the reimbursement for psychological assessments, a process which, if done well, can take several hours, if not longer. DHHS says the new rate will pay $229 per assessment, up from $100.

Psychiatric residential treatment facilities, however, will not see an increase — at least not for the time being. Kinsley said DHHS is working to establish a separate, long-term rate structure for providers in those settings.

“We didn’t do a rate increase on PRTFs right this moment because we have a different process underway [for them],” he said. “We’re trying to determine not just how do we increase their rate, but how do we pay for quality?”

Expansion approaches The rate changes were announced ahead of an anticipated surge in Medicaid enrollment in North Carolina.

On Dec. 1, the state’s long-standing income limit for eligibility will increase to 138 percent of the federal poverty level. That means single adults, a population that has been effectively ineligible for coverage under the current criteria, will qualify if they make less than $20,000 a year.

The threshold is higher for people with larger households. A person with a family of four, for example, will qualify if their income is less than $41,000 a year, or about $3,450 a month.

The first residents expected to benefit from the expansion are those currently enrolled in so-called Medicaid family plans, which offer fewer benefits than traditional Medicaid. DHHS estimates that 300,000 family plan enrollees will be automatically upgraded to full coverage.

Kinsley said the department is making an “all hands on deck” effort to ensure that expansion is implemented as smoothly as possible. Still, he stopped short of promising a totally seamless rollout.

“I’m confident that we’re going to have a bolus of people that come forward on [Dec. 1] that is going to be larger than what the performance of the statewide system, as far as our staff and our DSS office, can manage all on one day,” Kinsley said, referring to the Division of Social Services. “That’s normal for any type of new launch — any new product launch — that you bring out.”

He likened the state to an Apple store “with a line down the street” waiting to buy the latest iPhone. DHHS, he said, anticipates seeing “some full waiting rooms” once expansion goes live.

But the bigger challenge, according to Kinsley, might be sustaining that excitement after the initial rush.

“While I want a really smooth Day One, I also want to keep that energy up so that, come April, we’re still trying to find every potential person in this state that is eligible and get them enrolled,” Kinsley said. “Eighty percent of the people that are going to be in the Medicaid expansion benefit are coming from working families. These are hardworking people who maybe have multiple jobs and are taking care of their kids and are getting ready for the holidays.”

More than 2.8 million North Carolinians were enrolled in Medicaid as of October, according to data from DHHS.